(Yicai Global) July 29 -- Industrial and Commercial Bank of China, the world's largest bank, has joined with two Chinese state-owned asset management companies to buy a large stake in Bank of Jinzhou, signaling progress in restructuring the crisis-struck lender.

ICBC, China Great Wall Asset Management and China Cinda Asset Management issued separate statements yesterday saying that they had penned equity transfer agreements with some of Bank of Jinzhou's Chinese shareholders.

ICBC intends to invest as much as CNY3 billion (USD436 million) through a subsidiary, which had obtained a 10.8 percent stake in the target as of yesterday. Cinda did not specify the total amount spent acquiring its stake, which is now 6.5 percent. Great Wall also offered no details on either its investment or stake.

All three claim that their investment in Bank of Jinzhou, based in northeastern Liaoning province, is "financial." But ICBC is now the bank's largest shareholder and Cinda's stake has surpassed that of all other investors.

Ernst & Young and one of its accounting units gave up representing Bank of Jinzhou on May 31. Ernst & Young said it discovered the use of certain loans the bank issued to institutional clients was inconsistent with that described in credit documents. Other city commercial banks with aggressive business models have also run into operational difficulties amid slowing economic growth. Baoshang Bank was taken over by regulators in May.

Formed in a merger of city credit unions, Bank of Jinzhou has a large number of investors, with private firms as its major shareholders. The lender's top five Chinese investors had holdings of between 2.7 percent and 4.7 percent as of the end of June last year, public information shows.

The bank listed on the Hong Kong Stock Exchange in December 2015, but its shares [HKG:0416] have been suspended from trading since April 1 because it could not release last year's annual report in a timely manner. Its stock last traded at HKD7 (90 US cents). 

Editor: Ben Armour